Medicare FAQs

Anyone entitled to Medicare Part A (whether actually enrolled or not) or who is currently enrolled in Medicare Part B may join Medicare Part D to get help paying prescription drug costs. Enrollment is voluntary except for people who also receive benefits from Medicaid (Medi-Cal in California). If you qualify for Medicaid, the government automatically enrolls you in a Medicare Part D plan through which you will receive your prescription drug coverage.

There are four types of costs associated with Medicare Part D prescription drug coverage: premiums, deductibles, copayments, and a coverage gap during which period you must pay the full cost of your medications. People with low incomes may apply for a subsidy from the Social Security Administration to reduce these costs.

In 2013, Part D premiums range from $0-$50 per month (depending on the plans available in your town and on the particular plan you choose). The deductible — the amount you must pay out-of-pocket before Medicare will contribute to your prescription costs — for most plans in 2013 is $325. After you meet the deductible, Medicare will pay roughly 75% of your prescription costs.

After you and your plan together pay a certain amount for covered prescription drugs ($2,970 in 2013), your plan stops paying and you must pay the full cost of the prescription. The plan begins to pay again — and pays 95% of all further costs — when total expenditures reach a “catastrophic” level ($4,750 in 2013).

However, you will receive a discount on the cost of your medications while you are in the coverage gap.

When all of your medical bills are added up, you will see that Medicare pays, on average, only about half the total. There are three major reasons why it pays so little.

First, Medicare does not cover a number of major medical expenses, such as glasses, hearing aids, dental work, dentures, and a number of other costly medical services.

Second, Medicare pays only a portion of what it decides is the proper amount — called the approved charges — for medical services. When Medicare decides that a particular service is covered, it determines the approved charges for it. Part B medical insurance then usually pays only 80% of those approved charges; you are responsible for the remaining 20%.

Third, the approved amount may seem reasonable to Medicare, but it is often considerably less than what doctors actually charge. If your doctor or other medical provider does not accept assignment of the Medicare charges, you are personally responsible for the difference, up to a certain maximum.

Note that there are now several types of treatments and medical providers for which Medicare Part B pays 100% of the approved charges rather than the usual 80%. These categories of care include home health care, clinical laboratory services, and flu and pneumonia vaccines.

Anyone entitled to Medicare Part A (whether actually enrolled or not) or who is currently enrolled in Medicare Part B may join Medicare Part D to get help paying prescription drug costs. Enrollment is voluntary except for people who also receive benefits from Medicaid (Medi-Cal in California). If you qualify for Medicaid, the government automatically enrolls you in a Medicare Part D plan through which you will receive your prescription drug coverage.

Part B medical insurance is intended to cover basic medical services provided by doctors, clinics, and laboratories. However, the lists of services specifically covered and not covered are long, and do not always make a lot of sense.

Making the effort to learn what is and is not covered can be important, because you may get the most benefits by fitting your medical treatments into the covered categories whenever possible.

Part B insurance pays for:

doctor services (including surgery) provided at a hospital, a doctor’s office, or your home

All rules about how much Medicare Part A pays depend on how many days of inpatient care you have during what is called a “benefit period,” or spell of illness. The benefit period begins the day you enter the hospital or skilled nursing facility as an inpatient and continues until you have been out for 60 consecutive days. If you are in and out of the hospital or nursing facility several times but have not stayed out completely for 60 consecutive days, all of your inpatient bills for that time will be figured as part of the same benefit period.

Medicare Part A pays only certain amounts of a hospital bill for any one benefit period — and the rules are slightly different depending on whether the care facility is a hospital, psychiatric hospital, or skilled nursing facility, or whether care is received at home or through a hospice.

All people covered by Medicare Part A must pay an initial amount before Medicare will pay anything. This is called the hospital insurance deductible. The deductible is increased every January 1.

The rules of eligibility for Part B medical insurance are simpler than for Part A: If you are age 65 or over and are either a U.S. citizen or a permanent resident who has been here lawfully for five consecutive years, you are eligible to enroll in Medicare Part B medical insurance. This is true whether or not you are eligible for Part A hospital insurance.

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